Print 80 comment(s) - last by BRB29.. on May 29 at 9:16 AM

Tesla's early repayment is mainly due to last week's announcement regarding its plan to issue more stock and pay off the energy loan with the proceeds

Tesla Motors announced today that it has repaid its $465 million energy loan in full nearly a decade early.  

"I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the [loan] program, and particularly the American taxpayer from whom these funds originate," said Elon Musk, Tesla co-founder and CEO. "I hope we did you proud."

Tesla was approved to receive a $465 million loan from the U.S. Department of Energy (DOE) in June 2009. The loan, which was part of the Advanced Technology Vehicles Manufacturing program, was to be repaid by 2022. But in March of this year, Tesla received permission to pay the loan back five years early by mid-2017. 

But now, Tesla has repaid the whole sum -- nine years earlier than expected from the original 2022 due date.

Tesla's early repayment is mainly due to last week's announcement regarding its plan to issue more stock and pay off the energy loan with the proceeds. Tesla said it wanted to sell about $830 million in shares, and use $450 million in convertible senior notes (which are due in 2018) along with sales of 2.7 million shares (valued at about $229 million at the time) to pay back its federal loan.

Tesla Model S

Also helpful to Tesla's cause is the fact that it managed to start shipping 500 Model S sedans per week starting in March of this year, exceeding the sales outlook of 4,500 posted in the February shareholder letter. In fact, Tesla managed to sell 4,900 Model S sedans in the first quarter. The automaker plans to deliver 21,000 total for the year, which slightly exceeds previous forecasts of about 20,000. 

Tesla reported its first profitable quarter in Q1 2013, where it posted a net income of $11.2 million (a huge increase from an $89.9 million loss in the year-ago quarter). Excluding certain items, Tesla's profit came in at 12 cents a share, which was a boost from a loss of 76 cents a share in Q1 2012. Analysts expected a profit of about 4 cents a share. Revenue also saw a huge year-over-year boost, totaling $562 million (up from $30.2 million in the year-ago quarter). 

Tesla is certainly looking to keep that momentum going, and is doing by extending excellent service beyond the point of sale. Last month, the automaker announced a new battery replacement program as well as new service programs, which feature valet for customers who need to send their Model S' to the shop -- and can even borrow (or later buy) a better Model S or Tesla Roadster as loaner vehicles. 

Today's early repayment is a crucial point in the history of clean energy loans issued by the Obama administration. Even though DOE said today that losses in the loan program are at 2 percent of a $34 billion portfolio and less than 10 percent of the $10 billion loss reserve, it's hard to forget some of the large loan defaults made by now-bankrupt clean energy companies. 

Tesla/SpaceX CEO Elon Musk
In September 2011, Silicon Valley-based solar panel company Solyndra filed for bankruptcy after receiving a $535 million loan from the DOE in 2009. Government officials reportedly warned the administration of the viability of Solyndra, saying the company would go bankrupt in a matter of two years. The warnings were put aside in order to meet political deadlines.

Later in November 2011, Beacon Power, a company that creates flywheels to store power and increase grid efficiency by preventing blackouts, filed for bankruptcy after receiving a $43 million loan guarantee from the Department of Energy in August 2010.

But the failed energy loans didn't end there. Battery maker EnerDel's Ener1 subsidiary filed for bankruptcy in January 2012 after winning a $118.5 million grant from the DOE in August 2009. Ener1 was supposed to develop batteries for electric vehicles.

Just last month, it was announced that California-based Fisker Automotive -- which makes plug-in hybrid electric vehicles -- was talking bankruptcy. The automaker received $529 million in DOE loans in April 2010 for the development of high-tech vehicles. However, Fisker fell a little behind on its production schedule, and in May 2011, DOE froze the loans due to "unmet milestones." Fisker had only drawn $193 million of it at that point. 
Due to these frozen loans, Fisker is having a hard time securing funds to make its second car -- the Fisker Atlantic. Fisker is now looking for investors to help out financially, but the company's investor solution has drawn a lot of criticism because two potentials have been Chinese companies -- Zhejiang Geely Holding Group and Dongfeng Motor Group Co. This is seen as an issue because Fisker received U.S. taxpayer dollars to fund its Karma plug-in. 
Things have only gotten worse, as Fisker was forced to lay off 75 percent of its staff and even missed its DOE payment in late April. 

Thankfully, Tesla has had a better time with its clean auto production. The company can now look ahead to continued Model S success and production of its Model X crossover EV (which hoped to begin production this year, but was shelved to 2014 with deliveries expected in 2015).

Source: Tesla Motors

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RE: Awaiting the usual comments
By TSS on 5/23/2013 12:08:05 PM , Rating: 0
Fine i'll bite.

Tesla gets a tax credit on the model S, like every other EV with a large enough battery pack. If they've sold 4900 in the first quarter, that's 4900x$7500 or $36,750,000. Considering they posted a profit of only $11,2 million, you can *in fact* thank obama directly for making tesla profitable, atleast this quarter.

Yknow what, let's, for the F of it, calculate what that tax credit has cost the US tax payer so far.

Model S total sold: 7550 X $7500 = $56,625,000
Roadster total sold: 2500 x $7500 = $18,750,000(can't find just US sales though i doubt overseas sales where high)
nissan leaf: 25000 x $7500 = $187,500,000
toyota prius PEV: 15100 x $2500 = $113,250,000
chevy volt: 37000 x $7500 = $277,500,000(that's just the tax credit nevermind they sell every car at a loss)

Total cost to the US tax payer, so far: $653,625,000

But yknow, i can understand how nobody cares about that amount of money. After all, the US spends more on food stamps ($75 billion) then the entire GDP of Cuba ($68,7 billion). So spending the GDP of Samoa ($612 million) on cars for the well off is completly understandable.

RE: Awaiting the usual comments
By BRB29 on 5/23/2013 1:41:18 PM , Rating: 2
What is your definition of "well off"?

A typical college grad with a bachelor starts at 55-75k a year. In areas with lower salaries, they still start at about 50k. The really bad areas still pay you at least 45k.

If you can't afford a Models at ~$60k after a few years of employment then you are just bad at personal financial management.

If you put 20k down then your payment is ~650, 30k down and your payment is ~500. You will save ~$200 on fuel a month. You also get a $7500 tax credit. Seriously, if you can't afford this then it's your fault.

Don't give me the "not everyone can afford college" BS. Community college is free with Pell grants. Then transfer to a 4 year school. Pell grants and loans will cover 100% of costs or more unless you go to a private school.

If your parents make too much that you can't qualify for Pell grants then you still have scholarships. But I'm sure your parents won't mind paying for your CC tuition of 2-3k every 16 weeks.

Do people just want a high pay job without earning it? Then cry when they can't afford things any middle class can afford?

RE: Awaiting the usual comments
By PontiusP on 5/23/2013 2:21:28 PM , Rating: 2
You just posted a sensible comment encouraging personal responsibility. What?!?

RE: Awaiting the usual comments
By BRB29 on 5/23/2013 3:46:13 PM , Rating: 2
and got rated down because having common sense and personal responsibility is actually rare in this country.

Seriously, I grew up with nothing and my parents making minimum wage because they barely spoke english. All my siblings and I used scholarships, Pell grants and loans to get through school. I actually spent 7.5 years in the USMC and I'm getting my MBA and project management certification right now. It's not that it's so difficult, just hard work(grind). Some people are just allergic to hard work and dedication.

what's the next excuse? single parent? me too.

RE: Awaiting the usual comments
By OutOfTouch on 5/23/2013 7:01:15 PM , Rating: 3
I am glad that you got a pell grant but not all of us are that lucky. I decided to go back to school after my employers went out of business (twice) over the last few years. My wife and I made less than $40k a year combined during that time span and I barely qualified for subsidized loans, certainly not a pell grant. Unfortunately the pell grant system is another broken and abused system like food stamps. PS. Thanks for your service.

RE: Awaiting the usual comments
By BRB29 on 5/24/2013 8:26:32 AM , Rating: 2
Isn't Pell Grants for the unlucky ones? My parents combined made less than 20k for a family of 6. I'm happy this country gave everyone a chance to leave the ghetto.

I understand your position. It's hard when you're on the bottom and everything seems out of reach. In this country, anyone who wants an education will be able to get it. Keep pushing and don't give up.

I think the Pell grant and food stamps systems work just fine. The real problem is dishonest lazy people that wants to be a bum.

RE: Awaiting the usual comments
By M'n'M on 5/24/2013 12:10:36 AM , Rating: 2
I've tried to post a comment w/some references but alas the DT censor thinks my comment is SPAM and won't allow it. That, all in itself, is pretty funny given the actual SPAM posts you can see after every article.

RE: Awaiting the usual comments
By someguy123 on 5/23/2013 11:15:15 PM , Rating: 3
Pell grants aren't easy to obtain anymore even if you're in a low income bracket. Hell these days it's a struggle to get a full FSA loan without you and your family being broke (or lying). I find it ironic that you're posting about self responsibility while basing it on free-rides through your parents or government subsidies.

Being a college grad making 55k is "well off", and many people are well off regardless of not being able to buy that maserati. I don't see why being well off is seen a derogatory thing anyway. If you have a decent income then enjoy and don't get caught up in semantics.

RE: Awaiting the usual comments
By Ammohunt on 5/23/2013 1:47:04 PM , Rating: 3
Easier than that really:

Tesla: Win!

Fisker: Loss!
A123: Loss!
Solyndra: Loss!
Many Others i forget: Loss!

See why its a bad idea for the government to pick winners and losers? Because they suck at it!

RE: Awaiting the usual comments
By BRB29 on 5/23/2013 1:52:45 PM , Rating: 3
See why its a bad idea for the government to pick winners and losers? Because they suck at it!

They didn't pick winners or losers. You just demonstrated that they picked everyone willing to participate.

You also forgot GM

RE: Awaiting the usual comments
By Ammohunt on 5/23/2013 3:14:53 PM , Rating: 2
Just like welfare recipients.....

RE: Awaiting the usual comments
By BRB29 on 5/23/2013 4:20:04 PM , Rating: 2 much as I hate the welfare program, you're still wrong.

RE: Awaiting the usual comments
By Mint on 5/24/2013 8:34:14 AM , Rating: 3
More cherry picking and BS. The A123 loan will largely be paid back by new owners. Loans by Nissan and Ford will be paid back.

The DOE's ATVM loan program was a $25B. The losses are well under $1B. They helped Tesla get through $1B in losses before achieving profitability and becoming the $10B company it currently is.

"My sex life is pretty good" -- Steve Jobs' random musings during the 2010 D8 conference

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